“Breathing Space” – The Debt Respite Scheme?
The Government Debt Respite scheme comes into effect on 4th May 2021. It is a legally enforced Breathing space that allows you time to seek professional debt advice with the peace of mind that your creditors are unable to enforce or take legal action to recover the debts owed to them.
There are two types of breathing space, Standard
Breathing space and Mental Health Crisis Breathing Space.
Standard Breathing Space
Mental Health Crisis
Who is eligible
An individual with a qualifying debt who meets eligibility
criteria and conditions
A client with qualifying debt who meets
eligibility criteria and conditions, who is receiving mental health crisis
What is the criteria
• Must be an individual living in England or Wales |
• Must be struggling or about to start struggling to maintain payments
• You have to have at least one qualifying debt, such as credit cards, loans,
over drafts, payday loans, catalogues etc. Other debts including rent,
mortgage, utility and council tax arrears also qualify however you do have to
maintain ongoing payments and it is only the arrears that can be included.
• Not have the means to clear debts, e.g. ISA’s or assets which can be sold
• Not have a Debt Relief Order, and Individual Voluntary Arrangement or be an
• Not already had a breathing space in the last 12 months
• Must have a qualifying debt |
• Must be receiving mental health crisis treatment
What are the conditions?
• You must engage with the advisor throughout the Breathing
• You must keep paying some ongoing liabilities such as your
You must not take out additional
credit over £500
Nominated point of contact must engage with the debt adviser
How often can you apply
No more than once a year
Breathing Space Suitable for me?
If you are struggling or about to start struggling
with problematic debt and require time to seek debt advice and consider your
options Breathing Space could be for you.
of Breathing Space
Most importantly there is no charges or fees to be paid for applying for and being granted
Breathing Space will prevent creditors from taking
most types of enforcement action or adding fees and charges – as long as you
meet breathing space conditions (no requirement to meet conditions in Mental
Health Crisis Breathing Space).
Breathing Space provides you with the time and
opportunity to get advice from advisory organisations that are regulated and
experienced in assisting with problem debts. Creditors are prevented from
starting or continuing with any action during the Breathing Space period.
of Breathing Space
There are conditions which apply to Standard Breathing which
is not adhered to can mean that your Breathing Space is cancelled. These
- You must engage with Debt Advice
- You must report changes of circumstances
- You must pay certain ongoing liabilities (if you can afford to do so)
- You must not take out additional credit over £500
The conditions above do not apply
for Mental Health Crisis Breathing Space.
There are certain debts cannot be included in the breathing space. These include
ongoing rent or mortgage payments, ongoing utilities and council tax, unless
you have received a reminder notice for the remaining years bill for council
Although Creditors cannot apply or backdate the interest accrued or take
enforcement action during the breathing space, once the breathing space has
ended, if you haven’t kept up with payments it may still be treated as a breach
of the repayment plan
can provide “Breathing Space”
Breathing Space can only be provided by a debt adviser
regulated by FCA to provide Debt counselling or a local Authority who provides
debt advice to its residents.
The Debt Advisor Limited are regulated by the FCA and
all our advisors have undergone detailed training on Breathing Space.
When contact is made with The Debt Advisor during the
initial call the adviser will be able to determine whether Standard Breathing
Space or Mental Health Crisis Breathing Space is appropriate.
If so details of your name, address, date of birth and
creditor details will be added to the electronic service.
Your details will then be entered into the moratorium register by
the end of the following working day
Breathing Space will then start the following day and creditors
will be notified of the Breathing Space via the online portal.
For Standard Breathing Space
there will be a mid way review after day 25 and day 35. This review is to
determine all of the conditions for the Standard Breathing Space are being met.
For Mental Health Crisis
Breathing Space the debt adviser will contact the nominated point of contact
to check whether the individual is still receiving mental health crisis
treatment every 20-30 days. Once the mental health crisis treatment has ended
the Mental Health Crisis Breathing Space will end 30 days later.
All debt solutions should be very carefully
considered. Fees will be charged if a solution is taken in order for us to set
up your plan and maintain it – all fees will be outlined during your
consultation. For further information on fees, please see the FAQ section of the
different solutions available. Retained payment may place you further into
arrears. You have the right to a cooling off period of 14 days. It is likely
that your ability to obtain further credit in the short term will be affected
and this may also be the case over the medium to long term. Calls to our free
phone number from mobile phones and other networks may be charged.
The Insolvency Service website has helpful information
on https://www.gov.uk/options-for-paying-off-your-debts/overview to support those who find themselves in financial difficulty
during the recession.
The Debt Advisor Ltd is regulated by The Financial
Conduct Authority. This means we are able to offer debt advice and deliver both
formal and informal solutions. All debt solutions need to be carefully
considered and you must take independent debt advice. We hope that the
information and debt advice on this site including Frequently Asked Questions, will help inform you.
There are sources of free debt advice and services.
You can find out more by contacting the Money Advice Service on 0800 138 7777
or by visiting their website.